The term "contract' is defined by Section 2(h) of the Indian Contract Act as an agreement enforceable by law that arises between parties creating obligations. With the advent of Covid-19, the whole world has been pushed towards digitalization. While social distancing and quarantine have become a new way of life, the impact of these norms has changed the way people live. Organizations have started to evaluate how they do business. Online classes, digital conferences, and working from home are becoming the new normal.

With all of these changes, one has to wonder about how it has become more difficult for organizations to contract. Contracting and maintaining documentation physically, as it’s done usually has become increasingly hard in recent times owing to the Covid-19 outbreak. As the execution of contracts poses a challenge, the only viable solution available to us is “E-Contracts.”

 e-contracts are agreements in electronic form. These agreements are deployed through a software system, and they are drafted and signed in electronic form. While considering the legal validity of e-contracts in India, the legal provisions that need to be taken into account are

• The Indian Contract Act,1872.

• The Information Technology Act,2000.

• The Indian Evidence Act,1872.

The essential elements that need to be present while executing a contract under the Indian Contract Act,1872 such as offer and acceptance, lawful consideration, parties competent to contract, lawful object, and free consent are pre-requisites of e-contracts as well.

Section 10-A of the Information Technology Act, 2000 provides for the validity of contracts formed through electronic means.

Section 10-A: Validity of contracts formed through electronic means:

Where in a contract formation, the communication of proposals, the acceptance of proposals, the revocation of proposals and acceptances, as the case may be, are expressed in electronic form or by means of an electronic record, such contract shall not be deemed to be unenforceable solely on the ground that such electronic form or means was used for that purpose.

Through this provision, e-contracts gain legal recognition. Electronic records and electronic signatures are recognised under this Act.

The Supreme Court, in Trimex International FZE Ltd. Dubai Vs. Vedanta Aluminium Ltd., India [2010 2 SCC 1], has held that even without there being the execution of a formal contract, electronic communications if satisfying the requirements of the Indian Contract Act, constitute a legally enforceable agreement.

Section 1(4) of the Information Technology Act lists out the instruments to which the Act does not apply:

Negotiable Instruments;

Powers of Attorney;

Trust deeds;

Wills; and

Contracts for Sale or Transfer of Immovable Property.

Section 65 of the Indian Evidence Act recognizes electronic documents and Section 65-B states the procedure for furnishing electronic documents as evidence; admissibility under this section is subject to various conditions prescribed here.

The movement towards e-contracting due to the changes posed by Covid-19 is resulting in the frequent use of electronic documents. It has become extremely convenient to use software to execute documents and contracts with electronic signatures, in this scenario of social distancing.  Companies are now allowed to maintain records of documents, minutes, etc., in electronic form. But it is necessary that these documents should be dated and signed digitally, and no alteration should be capable. The Indian courts are not far behind this new way of conducting operations. Electronic hearings are now being conducted where electronic documents are being accepted. Several measures are being taken by state governments to facilitate payment of stamp duty as required by law, through electronic means. As the world is forced towards adapting to this new way of life, it seems the current crisis has forced people towards contracting in electronic form more frequently. Although this change is only recent, the Indian legal system has been readily equipped with the necessary provisions to facilitate this change. Soon, the traditional method of contracting will be taken over completely by e-contracts. 

This article does not intend to hurt the sentiments of any individual, community, sect, or religion, etcetera. This article is based purely on the author’s personal opinion and views in the exercise of the Fundamental Rights guaranteed under Article 19(1)(A) and other related laws being enforced in India for the time being.